merpay-overview_en

Transcript

1. 1 As of February 2024
2. 2 　　 Company Overview November 20, 2017 Established Tokyo, Fukuoka Offices Establishing new finance-related businesses Business Activities
3. 3 　　 Leadership Director, CFO Sayaka Eda Formerly Managing Director at Goldman Sachs Japan Co, Ltd. Director, CRCO Akira Inoue Formerly Senior Managing Director and Head of Internal Control at SMBC Nikko Securities Inc. Representative Director, CEO Takeshi Nagasawa After being in charge of growth for the mobile payment service Merpay, oversaw growth for Mercari Group’s fintech operations before assuming the role of CEO (Fintech) Director, CSO Keisuke Sogawa Formerly CTO of WebPay, Inc. Vice President, Chief Technology Officer Shunya Kimura Led the establishment of R4D (Mercari’s research and development organization) and the implementation of AI for Mercari Group Director Masato Yamamoto Formerly Head of Partner Sales at Google Japan Enterprise, and Head of Apple Pay Merchant Business at Apple Japan
4. 4 　　 Leadership Director Naoki Aoyagi Formerly worked at Deutsche Bank, and CFO, US corporation CEO, and general manager at GREE Director Kyosuke Nobukawa Formerly worked at Sumitomo Mitsui Card Co., Ltd. Vice President, CPO Mayumi Narisawa Formerly Head of Design at Merpay Vice President, CRO Masahiro Shidachi Formerly Head of the Group Risk Management Head Office at Nomura Holdings, Inc., in charge of credit risk management and enterprise risk management for Nomura Group Vice President of HR Ryo Umezawa As HR Director, oversaw a wide range of work to establish the company’s general HR functions like hiring, labor management, and HRBP Vice President of Customer Service / Vice President of Trust and Safety Kazushi Osari Vice President, COO Marketplace
5. 5 　　 Leadership Vice President of Engineering Noriaki Utsunomiya Former CTO and CISO of Supership Inc. Vice President of Engineering Keigo Watanabe Former Head of Engineering of Souzoh, Inc.
6. 6 Mission
7. 7 　　 What Is Merpay? Merpay is a mobile payment service operated by Merpay, Inc., that can be used within the Mercari marketplace app. This service enables users to utilize their Mercari sales balance1, funds added to their Merpay balance from a bank account or ATM, or the BNPL (buy now, pay later) Merpay Smart Payments service to pay for purchases at physical stores and online with their smartphone. Merpay supports both iD contactless payments2 and code payments and can be used at JCB merchants across Japan with Mercard, a credit card with a point-back rate that increases based on use of Mercari and Merpay. 1. In order to use Mercari sales balance, users must configure certain settings or use their sales balance to purchase Mercari points. 2. ”iD” is a registered trademark of NTT DOCOMO, INC.
8. 8 　　 Mercari Group’s “Circular Finance” The addition of Merpay (money and credit) and Mercoin (cryptoassets) to Mercari’s item lifecycle creates a circular relationship between users’ items, money, and credit, facilitating the growth of “circular finance” that grants users greater freedom and flexibility. It provides users with a valuable, uniquely Mercari experience. Payment Credit Crypto- assets Money Sales Listing Aiming to achieve their dreams Bitcoin Money Mercard Transaction History Credit Information Value Circulation Goods
9. 9 　　 Merpay’s Three Focus Areas Pay for everyday purchases all at once the following month Pay over several months at a fixed amount of your choice iD payment Code payment Various payment methods available Various services that utilize unique credit based on behavior history such as usage history on Mercari Payment Credit Asset Management Hold your phone over a reader Scan a code Virtual card Input a card number Borrow when needed and repay flexibly: interest rates fluctuate depending on the borrower's usage of Mercari Credit card Lump-Sum Payment Fixed-Amount Payment Merpay Smart Money Merpay Smart Payments Credit card Service that allows users to buy and sell bitcoin from within Mercari
10. 10 　　 Merpay’s Three Focus Areas Pay for everyday purchases all at once the following month Pay over several months at a fixed amount of your choice iD payment Code payment Various payment methods available Various services that utilize unique credit based on behavior history such as usage history on Mercari Payment Credit Asset Management Hold your phone over a reader Scan a code Virtual card Input a card number Borrow when needed and repay flexibly: interest rates fluctuate depending on the borrower's usage of Mercari Credit card Lump-Sum Payment Fixed-Amount Payment Merpay Smart Money Merpay Smart Payments Credit card Service that allows users to buy and sell bitcoin from within Mercari
11. 11 　　 Number of Merpay Users/Verified Users 1. As of December 31, 2023, the aggregated number of unique users (excludes users who have deleted their accounts) who had registered for Merpay Electronic Money, set up Virtual Card, applied for Mercard, opened an account for exchanging cryptoassets, or used Merpay QR Code Payments, Online Payments, or Merpay Smart Payments (lump-sum payment or fixed-amount payment), etc. (Million users) 90.0％ Identity Verification Rate Million users Million users
12. 12 　　 Payment Service Fee for Merchants We began applying a 2.6% payment service fee to Merpay usage from July 1, 2021. 1. Merpay: Applied a 2.6% merchant service fee to Merpay usage from July 1, 2021. d Payment: Merchants who apply online on or after December 1, 2023, are eligible for a promotion posted on d Payment’s website. For information about the previous promotion offering no merchant fees for d Payment, see the promotion information on the website. 2. Exceptions may apply. No start-up or fixed fees All you need is a smartphone. No monthly fees. All you pay is service fees on each payment. A service that lightens the burden on merchants.2 Stop worrying about service fees yen Essentially free1 For DOCOMO’s d Payment service
13. 13 　　 Integration with NTT DOCOMO In the beginning of September 2020, Merpay and DOCOMO launched use of a shared QR code between Merpay and DOCOMO’s d Payment service and worked together to promote implementation Merpay Merchants (Helping Introduce Cashless Payments to Small- to Medium-Sized Merchants) By placing just one QR code at the register, merchants can expect to welcome users of both the Merpay and d Payment mobile payment services. This reduces the burden on merchants and increases the impact of cashless payment on their business.
14. 14 　　 Building a Primary-Secondary Distribution Cycle with Mercari and Merpay Receives sales proceeds/adds money to balance Receives item Mercari Group’s services form a sustainable cycle in which users sell things they no longer need on Mercari (secondary distribution) and use the resulting sales proceeds to shop at physical and online stores (primary distribution) through Merpay. Sells things they no longer need on Mercari Buys new things using Mercari sales balance
15. 15 　　 Initiatives With Offline Merchants Trials underway with merchants to strengthen synergy between Merpay and Mercari 1. These initiatives are proofs of concept available at select locations. Introducing Merpay code payment Selling Mercari packing materials Expanding the user experience by implementing Merpay and selling packing materials White Express Daiso
16. 16 　　 Merpay’s Three Focus Areas Pay for everyday purchases all at once the following month Pay over several months at a fixed amount of your choice iD payment Code payment Various payment methods available Various services that utilize unique credit based on behavior history such as usage history on Mercari Payment Credit Asset Management Hold your phone over a reader Scan a code Virtual card Borrow when needed and repay flexibly: interest rates fluctuate depending on the borrower's usage of Mercari Credit card Lump-Sum Payment Fixed-Amount Payment Merpay Smart Money Merpay Smart Payments Credit card Service that allows users to buy and sell bitcoin from within Mercari Input a card number
17. 17 　　 Merpay Smart Payments— A Credit Service Based on “Trust” Lump-sum payment is not available to users under the age of 18. Users 18 or 19 years of age have an upper usage limit of 50,000 yen. • Smart Payments enables users to pay for purchases later, with the credit limit determined by their Mercari usage history. • The service also allows users to set their own usage limit and check their usage history, so they can manage their payments themselves. • Smart Payments provides flexible lump-sum payment/fixed-amount payment options, allowing users to adjust repayment amount at any time.
18. 18 　　 Merpay’s Definition of "Trust" We measure “trust” based not on who people are, but on what they have done. Length of employment Address Income Occupation Family structure
19. 19 　　 Mercari's Unique Data We determine whether a user will uphold their promise to repay based on their unique transaction data from Mercari. In this way, we can build trust, creating a new form of credit for the user. Notifies about completed payment Reviews Receives sales proceeds Purchases/pays to Reviews Sends Lister Buyer
20. 20 　　 Increasing Opportunities to Expand AI Credit, the Core of Deferred Payment Services In April 2021, the Installment Sales Act was partially revised, allowing AI to be used to determine credit rather than traditional credit systems. As a result of the new system, business operators began offering small-sum deferred payment services, accelerating the momentum of deferred payment services in Japan. Aug 2021 Merpay acquired AI credit certification - Merpay acquired the first certification on August 27, 2021 - This enabled Merpay to calculate how much a user could affordably be expected to pay based on data such as Mercari usage history Apr 2021 Bill to revise the Installment Sales Act announced A bill to partially revise the Installment Sales Act was ratified by the cabinet in March 2020 and announced in June of the same year Revised Installment Sales Act enacted The revised Installment Sales Act defined the following two points, among others: 1. Introduction of regulations for small-sum deferred payment made in installments 2. Allowance for enhanced screening methods This introduced a registration system for business operators providing small-sum (100,000 yen or less) deferred payment services and enabled the use of AI for credit screenings instead of traditional screenings to determine the amount a user is likely to be able to pay.
21. 21 　　 Visualization of Usage Status and Flexible Payment Methods Displays the amount of time until repayment is complete, as well as the monthly payment amount and fees Enables flexible payments + Can use Mercari sales balance + Can pay whenever you want + Can adjust the payment amount after purchase Visualizes usage status Allows users to create a payment schedule that reasonably fits with their lifestyle
22. 22 　　 Deferred Payment Service Usage 30% of people use deferred payment services. This number tends to be particularly high in younger age groups. (Merpay, October 11, 2021: “Survey on Consumption and Payment Methods” (https://jp.merpay.com/news/2021/10/202109bnplsurvey/)) Over 70% of deferred payment service users have a credit card
23. 23 　　 Strengths of Deferred Payment Services Compared to other payment methods, smartphone-based deferred payment services excel in both usage and payment management features. Right away Can see payments right away from a smartphone Usage history automatically updated Automatically withdrawn on a designated date Can choose a payment date Can only check online statements several days later Requires manual management, like recording payments separately Immediately reflected in balance Can check balance history Cash Debit cards Credit cards Smartphone deferred payment services Payment timing Confirmation/ management of use
24. 24 　　 Users of deferred payment services are more interested in managing their finances Users Choose Deferred Payment for Ease of Management With credit cards, it’s easy to overuse them. Deferred payment services have the advantage of both usage and payment being easy to manage (Merpay, October 11, 2021: “Survey on Consumption and Payment Methods” (https://jp.merpay.com/news/2021/10/202109bnplsurvey/))
25. 25 　　 User Examples A woman in her 30s A woman in her 20s Mainly uses deferred payment services Frequently makes large payments when shopping for contact lenses, clothes, food, etc. + It’s easy for her to visualize her usage + She can carefully manage payment amounts and timing herself Uses Merpay Smart Payments for everything Uses iD contactless payment at physical shops and the virtual card online + When she exceeds her personal budget, she can adjust her budget by selling things she no longer needs + She can see her history for buying and selling things all on the same app Main payment method Usage scenarios Reasons for use
26. 26 「メルカード」
27. 27 Significantly Increasing Stores Supporting Merpay Payment In November 2022, we began issuing the Mercard credit card. In just over one year from the date when all users became eligible to apply, we issued more than 2.5 million1 cards. Mercard allows users to make purchases at approximately 46 million JCB merchants worldwide2, on top of the stores that support code payments and iD payments. Mercard iD payment Code payment 1. Number of cards issued as of January 2024 (just over one year starting from December 2022, the month of the full release of the service) 2. Number of JCB merchants as of the end of September 2023. Mercard is a credit card shopping service. More than 2.5M cards issued in just over 1 year
28. 28 The Four Pillars of Mercard Complete the Mercard application from the Mercari app in as little as one minute Point 1 The initial application takes as little as one minute for Mercari users who have already verified their identity (using eKYC). You can receive your card through the mail and start using it in as little as four days. Verified users 15.15 million Visualize and manage your Mercard usage right from the Mercari app Point 2 When your Mercard is used, you will receive an instant notification right to your Mercari app. You can also check your usage history, set spending limits, and make partial payments. (As of Sep. 30, 2023)
29. 29 The Four Pillars of Mercard Flexibly choose the timing and method of your payments Point 3 Payments are made each month for the amount used in the previous month, but you can use your Mercari sales balance and make payments at any time, from the first to the last day of the month. Furthermore, while you can pay for an entire month of card use at once in a lump-sum style payment, Mercard also allows you to select individual purchases to pay for in advance of others. Benefit from a unique credit system that doesn’t rely only on conventional factors like age and occupation Point 4 Merpay’s credit services are easy for anyone to use, leveraging a unique form of credit based on past Mercari and Merpay usage rather than only conventional factors like age, occupation, and annual income.
30. 30 Features That Make Mercard Safe & Secure Plus... Mercard is delivered through the mail, so you don’t have to worry if you aren’t home when it arrives. Even after it arrives, it can’t be used until you personally activate it by opening the Mercari app and touching your phone to the card. (Only available for devices that support NFC)
31. 31 Constant Point-Back Rewards System In addition to the launch of Mercard, we have started offering point-back rewards to Mercard and Merpay Smart Payments deferred payment users. Using these services, users receive 1% back for purchases made at stores and a maximum of 4% for purchases made on Mercari. The point-back rate for purchases made on Mercari can be increased not just by making payments at stores, but by buying and selling items on Mercari.
32. 32 　　 • In August 2021, we launched Merpay Smart Money, a small-sum loan service that Mercari users can apply for within the Mercari app and that utilizes Mercari usage history to determine a user’s interest rate and borrowing limit • The service focuses on not only providing appropriate credit, but making that credit balance easy to repay, allowing users to repay using their Mercari points/sales balance and change their monthly repayment day, repayment amount, and other repayment plan details within the app Merpay Smart Money—Small-Sum Loan Based on Mercari Usage 　　　 Maximum borrowing limit is 400,000 yen. Interest rate and borrowing limit are determined through a screening process based on the user’s Mercari usage history. Not available to users less than 20 years of age or over 70 years of age.
33. 33 　　 Interest and Borrowing Limits Matched to Mercari Usage Based on the user’s Mercari usage history, the borrowing limit can be set anywhere from 1,000 yen to 400,000 yen, with the interest rate between 3.0%–15.0%
34. 34 　　 Key Features of Merpay’s Safe and Secure Credit Services Credit based on Mercari usage history Flexible payment methods Visualizes usage status Mercari sales balance We also have a dedicated team working daily to improve quality of the service, and we’re working to incorporate external experts’ opinions regarding provision and administration of the service
35. 35 　　 Merpay’s Three Focus Areas Pay for everyday purchases all at once the following month Pay over several months at a fixed amount of your choice iD payment Code payment Various payment methods available Various services that utilize unique credit based on behavior history such as usage history on Mercari Payment Credit Asset Management Hold your phone over a reader Scan a code Virtual card Input a card number Borrow when needed and repay flexibly: interest rates fluctuate depending on the borrower's usage of Mercari Credit card Lump-Sum Payment Fixed-Amount Payment Merpay Smart Money Merpay Smart Payments Credit card Service that allows users to buy and sell bitcoin from within Mercari
36. 36 　　 暗号資産 CryptoAsset NFT DigitalAsset 主な事業
37. 37 　　 Allowing Users to Buy and Sell Bitcoin Within the Mercari Marketplace
39. 39 　　 Exceeded 1M Users in 7 Months After Launch, With 81% Never Having Used Crypto Before
41. 41 　　 Efforts to Ensure a Safe and Secure Product We implement measures to prevent fraud in order to ensure a safe and secure user experience. Compensation/ support provided in case of an incident Monitoring conducted 24/7 Authentication and identity verification at time of registration and use
42. 42 　　 AI/visual check Merpay identity verification (eKYC) Identity verification via ID + selfie KYC using Individual Number Card (JPKI) Fraud coverage Registering for Mercari Connecting to financial institutions Anti-fraud countermeasures employed in the process from account creation to bank account connection/service use 1. Two-factor authentication (SMS) 2. Identity verified against name on bank account 3. Anti-fraud monitoring when charging from bank/using Merpay 4. Total coverage in the event of an incident Transferring funds from bank to Merpay Using Mercari/Merpay Ensuring a safe and secure environment has remained a priority for Merpay. We have implemented identity verification and anti-fraud countermeasures, as well as strengthened identity verification measures (eKYC). The number of Merpay users who have completed identity verification (eKYC) has increased dramatically, helping Merpay become the first payment service to resume new connections and bank charging with financial institutions that had suspended such connections from November 2020 onwards, such as Japan Post Bank, Gunma Bank, Tochigi Bank, and Nagano Bank. Efforts to Ensure a Safe and Secure Product
43. 43 　　 In March 2021, we launched an identity verification process that uses Japan’s public Individual Number Card identification system (JPKI). Merpay is the first mobile payment service provider to implement identity verification using JPKI. Due to efforts to strengthen eKYC and promote identity verification, Merpay reached 15.15 million identity-verified accounts as of December 2023. Percentage of identity-verified users: 90.0% 15.15 million users Efforts to Ensure a Safe and Secure Product Simple KYC using official identification (Individual Number Card) A first in the payment industry Individual Number Card Verification
44. 44 　　 Appendix: Growth of Features/Services Since Merpay’s Launch Feb–Mar 2019 iD Payments/ QR Code Payments Available at iD and Merpay merchants nationwide, including convenience stores, restaurants, drug stores, and fast food Jul 2020 Merpay Smart Payments Allows users to defer payment for items based on past usage of Mercari and Merpay Online payments Enables use of Merpay for not only offline purchases, but online as well Sep 2020 Send/receive Enables users to send their Merpay balance/points to family and friends No-contact service Apr–May 2019 Growing Wallet Enables users to utilize their Merpay balance on the peer-to-peer investment service Funds Nov 2020 Mar 2021 Shared d Payment/ Merpay QR code Enables use of single QR code for both d Payment and Merpay Virtual card Enables users to easily issue a card number which can be used to pay using Merpay balance at many online stores Identity verification using Japan’s Individual Number Card (JPKI) Support for identity verification using Japan’s public Individual Number Card identification service (JPKI) Merpay Smart Payments (fixed-amount) Allows for fixed-amount payments, whereby users pay in installments from the following month onwards Mercari Donation Enables donation of Merpay balance, charged from Mercari sales balance or bank account, etc., to local governments and other organizations of the user’s choice Merpay Smart Money Aug 2021 A small-sum loan service that Mercari users can apply for within the Mercari app and that utilizes Mercari usage history to determine a user’s interest rate and borrowing limit Nov 2022 Mercard A comprehensive, flexible credit card that allows users to receive instant notifications, check their usage history, and pay their bill right from the Mercari app Also offers up to 4% points back from selling, buying, or making purchases at stores.
45. 45 　　 History: Merpay Merpay, Inc. established Support for iD contactless payments Added support for code payments and released the coupon feature Reached 1 million users of Merpay Electronic Money Released Merpay Smart Payments (formerly Merpay Deferred Payment) Released Online Payments feature Reached 2 million users of Merpay Electronic Money　 Reached 4 million Merpay users Reached 5 million Merpay users Business alliance with Shinkin Central Bank concluded; reached 6 million Merpay users Origami Inc. joined Mercari Group; Mercari, Merpay, and NTT DOCOMO agreed on partnership Reached 7 million Merpay users Fixed-amount payment and sending/receiving features released Began providing a shared QR code for d Payment and Merpay Reached 8 million Merpay users Nov 2017 Feb 2019 Mar 2019 Apr 2019 May 2019 Jun 2019 Sep 2019 Oct 2019 Jan 2020 Feb 2020 Jun 2020 Jul 2020 Sep 2020 Oct 2020
46. 46 　　 History: Merpay First stage of the Growing Wallet: Merpay available for use on Funds Became the first service in the industry allowed to resume the bank connections that were suspended due to fraud cases (Resumed connections with Japan Post Bank in January) Reached 8.5 million Merpay users Began providing a “virtual card” that can be used to pay for purchases on online stores with Merpay Smart Payments Became the first service in the industry to support KYC using the IC chips in Individual Number Cards Reached 9.8 million Merpay users Reached 10 million Merpay users Launched small-sum loan service Merpay Smart Money Launched the Mercard credit card and constant point-back rewards system Reached 650 thousand Mercards issued Reached 1 million Mercards issued Reached 1.5 million Mercards issued Mercard and the bitcoin trading service selected as winners of the Good Design Award 2023 Reached 2 million Mercards issued Reached 2.5 million Mercards issued Nov 2020 Dec 2020 Mar 2021 Apr 2021 Aug 2021 Nov 2022 Apr 2023 Jun 2023 Sep 2023 Oct 2023 Nov 2023 Jan 2024